North Carolina earns failing marks in national school funding fairness report

WILMINGTON, NC (WWAY) — North Carolina received failing grades in two key categories in a new national report examining how fairly states fund their public schools.

The Education Law Center has released ‘Making the Grade 2025: How Fair Is School Funding in Your State?‘, the latest installment in its annual series evaluating education funding systems across the country. The report warns that many states are failing to adequately and equitably fund public education, a concern heightened by potential federal funding cuts and proposals to dismantle the U.S. Department of Education.

In the report, North Carolina earned:

• Funding Level: Grade F, ranking 50th
• Funding Distribution: Grade C, ranking 17th out of 48 states evaluated
• Funding Effort: Grade F, ranking 50th

According to the report, North Carolina’s combined state and local funding per pupil is well below the national average when adjusted for regional cost differences. The state also makes a lower-than-average effort to fund K-12 education when measured as a share of its economic output.

The Education Law Center says funding effort is a critical indicator because it reflects how much a state prioritizes public education relative to its overall wealth.

“The current uncertainty surrounding federal funding underscores just how important it is for states to establish fair and equitable state funding systems,” said Dr. Danielle Farrie, the report’s co-author and research director at the Education Law Center. “States are responsible for creating a strong foundation for school funding.”

While North Carolina performed poorly in overall funding and effort, the report found its funding distribution to be moderately progressive, meaning higher-poverty school districts receive more per-pupil funding than lower-poverty districts. However, the Education Law Center notes that this does not offset the state’s low overall investment in public schools.

Nationwide, the report found:

• No state earned an A across all three funding fairness indicators
• Only 17 states have even modestly progressive funding distributions, down significantly from last year
• Nearly half of all states continue to invest less in public schools than their economic growth would support

The report also highlighted sharp disparities between states. The lowest-funded state provides about $17,000 less per student than the highest-funded state.

Several states, including Florida, Idaho, and Tennessee, earned Fs in all three categories. Meanwhile, California showed significant improvement after investing in a more equitable school funding formula.

The report also analyzed federal education funding using pre-pandemic data and found that while federal dollars help improve equity within states, they do little to close funding gaps between states. Researchers emphasized that states ultimately bear responsibility for ensuring adequate and equitable school funding.

“Federal revenue clearly plays an important role in improving equity in school funding,” said Education Law Center Executive Director Robert Kim. “But state and local policymakers must ensure students have the resources they need, regardless of what actions are taken by the federal government.”